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Automobile companies to see 30% spike in capital expenditure in next two fiscals

According to Crisil, passenger vehicle (PV) makers will account for about 70 per cent of this Rs 58,000 crore additional capex, followed by commercial vehicle manufacturers at 20 percent and the balance by two-wheeler makers.

June 18, 2018 / 08:43 PM IST

Automobile companies will increase their capital expenditure by at least 30 percent to Rs 58,000 crore over the next two fiscal years to meet the rising demand as well as to meet the new regulatory requirements, says a report.

According to Crisil, passenger vehicle (PV) makers will account for about 70 per cent of this Rs 58,000 crore additional capex, followed by commercial vehicle manufacturers at 20 percent and the balance by two-wheeler makers.

Anuj Sethi, senior director at Crisil, said about half of the Rs 58,000 crore will be to expand capacity to cater to growth in demand, and the balance for new products and technology to conform to tighter regulations.

The OEM space is largely duopolistic with the top two players in each segment enjoying 60-70 per cent market share.